Hodges v. Carter
Facts:
Plaintiff had fire insurance from four companies and hired defendants to file with them on plaintiff's behalf after a devastating fire. Defendants served the companies incorrectly, losing plaintiff the payouts, so plaintiff is now suing the defendants.
Procedural History:
Trial court found for the defendants. Appellate court reversed.
Issue:
Are lawyers liable for their harms when they acted in their best judgment?
Plaintiff's Argument:
Defendants were negligent in serving companies incorrectly.
Defendant's Argument:
Defendants acted in good faith and their best judgment.
Rule:
Lawyers who act in good faith and an honest belief that their advice and acts are well founded and in the best interest of their clients are not liable for mere errors of judgment or mistakes in points of law not yet settled by a court of last resort in his state and on which reasonable doubt may be entertained by well-informed lawyers. They are liable for damages resulting from a lack of knowledge and skill ordinarily possessed by other attorneys.
Reasoning:
Lawyers are implied to:
- Possess the requisite degree of learning, skill, and ability necessary to the practice of their profession and which others similarly situated ordinarily possess
- Exert their best judgment in the prosecution of the litigation entrusted to them
- Exercise reasonable and ordinary care and diligence in the use of this skill and in the application of his knowledge to his client's cause
Attorneys generally assumed the defendants actions to be valid in the state, as they had been doing it for decades without issue, so they did not lack ordinary knowledge.
Holding:
No, lawyers are not liable for their harms when they acted in their best judgment. Affirmed.